Nightmares With Credit Cards
Do You Want to Avoid Nightmares With Credit Cards?
Most people spend more when using credit cards instead of cash, so it can be easy to drown in credit card debt without realizing it. We do not want that to happen to you. Make a budget before spending, and do not spend what you can not pay.
We remind you that, when you use your debit card, the money is deducted directly from your checking account. But with a credit card you are taking the borrowed money. So, again, before charging a purchase to the card, think about how you're going to pay.
To keep your expenses controlled with credit cards, start by choosing a single category that charges the card, for example gasoline or groceries. Do not add a new category until you are sure that each month you can pay what you borrow.
Also try to keep your card balance below 70% of your limit and keep the debt low enough so that the minimum payments required are less than 10% of your monthly income.
Best practices regarding credit cards
Find a card with low fees and low interest rates
Look for a credit card with a low annual fee and a low interest rate. Read the agreement with the cardholder. Indicate all fees and financing charges. If you have any questions, call the customer service number of the credit card company.
Pay as much as possible
Make at least the minimum monthly payment every month, but pay the maximum possible. When you can, pay the entire balance. This will reduce the finance charges you pay.
Make sure you are able to pay what you spend
Do not use your credit cards to buy things that you really can not pay. Follow your spending plan.
Stay within your limit
Keep a record of your charges to the credit card throughout the month. If you stay within your credit limit, you will avoid charges for exceeding the limit and you will avoid damaging your credit score. Try to always keep your credit card balance below 70% of the limit. That will help you accumulate good credit history by showing lenders that you can control the credit you use and leave enough credit available for emergencies.
Pay on time
Pay your credit card bills on time. This is one of the best ways to accumulate good credit history, as it shows lenders that you are trustworthy. It also helps you avoid late fees. Make sure to check your account statement every month to see the payment date, as it is not necessarily always the same date.
Avoid cash advances
Some credit card companies can offer you a cash advance. Avoid this option except in cases of emergency. You will be charged a fee for the advance and the interest rate is usually much higher!
Ask for help for debts as soon as possible
If the debts are causing you problems, ask for help as soon as possible. Get in touch with your lender. Try to arrange a payment plan that works for both. You may also want to consult a credit counselor, an experienced professional who can help you get out of debt.